Tilman in trouble


#1

(https://www.bizjournals.com/houston/news/2018/07/02/tilman-fertitta-s-new-400m-galleria-tower-faces.html)

From article:
Houston billionaire and Rockets owner Tilman Fertitta’s new $400 million mixed-use tower in the Uptown area has had dozens of liens filed against it by unpaid contractors.

In total, the outstanding liens as of July 2 add up to more than $30.5 million, according to documents obtained by the Houston Business Journal that were filed with the Harris County Clerk’s office.

The tower, dubbed The Post Oak, includes high-end hotel, office, residential and retail space. It broke ground at 1600 West Loop South in 2015 and opened in March. Originally expected to cost around $350 million, that figure is now at $400 million, according to Jeff Cantwell, chief development officer and executive vice president for Landry’s Inc., which is owned by Fertitta.

The largest outstanding lien as of July 2 was filed by Houston-based Tellepsen Builders Inc., which was the general contractor for the core and shell of the project. Tellepsen’s lien, which was first filed in January and amended in June, claims the company is owed $19.89 million. Tellepsen issued the following statement to the Houston Business Journal through a spokesman:

“Tellepsen and our unpaid subcontractors are local, family-owned businesses that care about our projects, our people, and our community. It is unfortunate that negotiations to pay us for our work have failed. Despite the fact that the luxury hotel has been open since March 2018, the owner, Landry’s, has failed to pay us and several of our longtime subcontractor partners in a timely manner. Tellepsen has wonderful clients we have worked with through four generations of our family, but this was the first time we have worked with Landry’s. We expect that we can work this out fairly and swiftly.”

Cantwell with Landry’s said the liens filed against the building represent less than 10 percent of the job, and the company is still conducting audits and going through the close-out process.

Tellepsen estimates that during peak construction time, there were about 720 construction workers on the project associated with the general contractor.

The Texas Constitution and Texas Property Code give mechanics, artisans and materialmen the right to claim an interest, or lien, in the property they worked on for the value of the labor or material that remains unpaid. Liens must be filed in the county of the project.

The second-largest outstanding amount in liens filed against 1600 West Loop South as of July 2 totals around $3 million owed to Houston-based Trio Electric Ltd., which recently finished the 40-story Market Square Tower in downtown Houston and the 30-story headquarters for BHP Billiton on Post Oak Boulevard. This was also the company’s first time working with Landry’s, according to a statement sent to the HBJ.

“It is unfortunate TRIO Electric has had to file a lien against Landry’s for work completed on the Post Oak Tower. TRIO has paid its employees, suppliers and subcontractors for their work and is disappointed to end such a beautiful project this way. Since starting business in 1983, TRIO (formerly Pollock Electric) has not had a non-payment issue like this one,” Trio Electric said in a statement through a spokesman.

Due to time periods and complex issues associated with the Texas lien laws, sometimes liens are filed prematurely, according to Letitia Barker, president of Dallas-based Haley-Greer Inc., a curtain wall glass and glazing company that filed a lien against 1600 West Loop South June 1 claiming more than $1.6 million in unpaid bills.

“We don’t have any expectations of not being paid; we just did that to preserve our rights,” Barker told the HBJ.


(Patrick) #2

He was pretty leveraged after purchasing the Rockets by himself. I saw in regards to Tellepsen that his lawyer stated that they had to bring other contractors in to finish parts of the job that Tellepsen couldn’t finish which is why they didn’t pay them.


(Russel ) #3

Is it true that Tillman has mob/mafia ties? Or is that just a rumor?


#4

There are probably work completion and quality of work issues that are part of
the negotiations. This is always a problem in things as simple as home remodeling.


(Mike Higdon) #5

Is it true that you stopped beating your wife?


#6

Good one Mike. Some people.


(David) #7

Is he really in trouble? Or is it a case that doing business with Tilman is never easy?


(Patrick) #8

I think he’s ok…he isn’t selling off Rockets players yet and just signed CP3 to a huge contract. Probably just some normal business issues.


#9

B&M liens are filed in every construction dispute. It doesn’t mean the contractor is in the right.


(Luke P) #10

A subcontractor only has a small window (about 3 months) in which to file such a lien so, as the glass contractor said, they are filing them to preserve their rights. This is fairly normal, but if things went south they could lose their chance to recover the remainder of what’s owed if they didn’t already have their “name in the hat” so to speak. Having to recall a bit from my construction law class I took at UH :grinning:


(Russel ) #11

It was a joke guys!


(Mike Higdon) #12

I hoped it was, but you never know intentions in print. What one thinks is funny and said lightly is often taken seriously because one can’t sense intention, just what he sees.


(09Frontiersmen) #13

Yes.


#14

You do know, don’t you, that jokes are supposed to be funny. - I guess not.

Anyway, Texas lien laws are extremely complex; and no, I do not believe the lien claims filed on this project indicate anything other than the existence of a dispute between the project’s owner and a general contractor.


(Russel ) #15

Was only being facetious my friend…


#16

I was an employee at this job (under a subcontractor) and man, what a mess. If I was a contractor, I would never bid a job under this guy, seriously, although I am an UH grad. What a friggin mess this guy made (the owner). I hope these guys get paid. Just between you and me, the most poorly planned and executed construction project I have ever witnessed in my 51 years on this earth. De verdad!


(Craig C.) #17

Would that fall at the feet of the general contractor? The developer hires the general contractor to make sure the job gets done. Maybe that is why they haven’t been paid in full, just a thought


(Mike Higdon) #18

Yes, it would. I hope no one thinks Tillman was planning and scheduling the work, or involved in the actual design. He, or his designee, would have been in the approval of the budget and the architects and artists conceptual drawings.


#19

The general contractor (Tellepsen) is under contract with the owner (Landry’s Corporation). The subcontractors are under contract with the general contractor. The general contractor submits an application for payment monthly to the owner, which includes general contractor and subcontractor invoicing. If the owner doesn’t pay the general contractor, then the general contractor can’t pay the subcontractors.

Liens are filed in these situations to legally protect the contractor and their subs. I don’t know the details, but I bet there is some type of internal dispute as to the remaining monies owed…I’m sure that payment will eventually be made and/or a compromise reached.


#20

Did they have a lot of design changes during construction and/or did they get started without firm plans/specs? Changes will cause price increases and delays.
The delays themselves can cause price increases as subs sit and wait for marching orders…but the meter keeps ticking. Project managers or owners who don’t understand and take that seriously can make a mess of things.

…and no…I seriously doubt Tillman, a billionaire, is in trouble over $30M…